DYNAMICS OF CHANGES IN TOTAL CAPITAL, AUTHORIZED CAPITAL AND RETAINED PROFIT OF ARMENIA'S BANKING SYSTEM (according to balance sheets of Armenia's commercial banks for 2002-2004)	DYNAMICS OF CHANGES OF TOTAL INCOMES, TOTAL EXPENSES AND BALANCE PROFITS OF ARMENIA'S BANKING SYSTEM (data of balance accounts of Armenia's commercial banks for 2002-2004)	DYNAMICS OF CHANGES OF CREDITING IN TOTAL ASSETS OF ARMENIA'S BANKING SYSTEM (data of balance accounts of Armenia's commercial banks 2002-2004)	DYNAMICS OF CHANGES OF CALL AND TIME DEPOSITS IN TOTAL LIABILITIES OF ARMENIA'S BANKING SYSTEM (according to balance sheets of Armenia's com.banks in 2002-2004)
STRUCTURE OF LIABILITIES OF INSURANCE COMPANIES IN ARMENIA FOR 01.07.2004 (data of financial reports of insurance companies)	SHARE OF OWN CAPITAL AND ASSETS OF INSURANCE COMPANIES IN ARMENIA IN GDP FOR 01.07.2004	BASIC STRUCTURE OF ASSETS OF INSURANCE COMPANIES IN ARMENIA FOR 01.07.2004 (data of financial reports of insurance companies)	SHARE OF INSURANCE PREMIUMS AND NET PROFITS OF INSURANCE COMPANIES IN ARMENIA IN GDP FOR 01.07.2004
DYNAMICS OF CHANGES OF ARMENIA'S GROSS INTERNATIONAL RESERVES (data of the CB of the Republic of Armenia for 1999-2003)	DYNAMICS OF CHANGE OF MONETARY BASE, MONEY SUPPLY AND DYNAMICS OF CHANGE OF ARMENIA'S GOLD AND FOREIGN EXCHANGE RESERVES (according to Armenia's CB 01.07.2000-01.07.2003)	DYNAMICS OF CHANGES IN MAIN INDICATORS OF ARMENIA's FINANCIAL MARKET (according to data of the Ministry of Finance and Economy and the CB of Armenia for the 17 February of 2004)

ANALYST & ARTICLES

ARMENIA'S COMMERCIAL BANKS IMPROVE THEIR TECHNOLOGICAL BASIS

OUSTING OR PEACEFUL CO-EXISTENCE?

CLOSURE OF HSBC BAKU BRANCH - YET ANOTHER BLOW ON AZERBAIJAN'S SHATTERED REPUTATION AS "NEW MARKET WITH EXCELLENT FUTURE"

ARMECONOMBANK, ARMENIAN DEVELOPMENT BANK AND "HSBC ARMENIA" BANK DECLARED GOVERNMENT'S BEST AGENTS ON STATE INTERNAL DEBT MANAGEMENT IN 2001, "INECO" AND AGRICULTURAL COOPERATIVE BANK OF ARMENIA BEST DEALERS IN STB MARKET

PRICE LEVEL FLUCTUATIONS EXPECTED WITHIN 3%: TIGRAN SARGSSIAN

"BANK ANELIK" BECOMES SERIOUS COMPETITOR FOR WESTERN UNION AND MONEYGRAM

"ARDSHINBANK" HAS NO PROBLEMS WITH FULFILLING COMMITMENTS

CB INTERVENTION ON INTERBANK MARKET HAMMERS DEMAND FOR USD ON CURRENCY RETAIL MARKET

INTERVIEW

CAFESJIAN SAID: "HERE IS THE MONEY - GO AND MAKE BUSINESS" The interview given to ARMINFO by Jonathan Stark heads the holding Cascade Capital

"ONE CAN NOT ONLY WORK IN KARABAKH BUT ALSO WORK SUCCESSFULLY" The interview given to ARMINFO by Chairman of the Board of the Artsakhbank closed jsc Kamo Nersissyan

CB RA REMOVES NOT VIABLE BANKS FROM THE MARKET:TIGRAN SARKISSIAN
Below is an interview of President of the Central Bank of the Republic of Armenia Tigran Sarkissian to the ARMINFO news agency

CREDITS ALLOCATED BY USDA TOTAL $31.5MLN. The exclusive interview to ARMINFO Marketing Assistance Program Director Craig Infanger

UNLIKE OUR COLLEAGUES IN AZERBAIJAN, WE WORK IN A DIFFERENT REGIME IN ARMENIA: CHARLES GREGORY
Below is an interview of Chief Executive Officer of the "HSBC Bank Armenia" CJSC Charles B. Gregory

UNLIKE INDIVIDUALS BIG ARMENIAN COMPANIES DO NOT WANT TO PAY TAXES

Armenia has the lowest index of tax revenues in the former USSR. The ratio between tax revenues and GDP is 15%, which is quite low. In Russia the ratio is 30%, in the Baltic states even more. No much better is the situation in the other two South Caucasian states. International experts say that this is due not so much to the peculiarity of the "southern" mentality - that is to be indifferent to one's state - as to the high rate of corruption of the state itself. In any case, such a low rate of tax collection makes the state helpless in implementing its social policy and state investment programs. In this connection, ARMINFO's correspondent has asked the Head of the IMF Armenian Office James McHugh to comment on the above situation.

Q: It is well known that the situation with the tax collection is the Achilles' heel of the IMF's PRGF program. What do you think of it today that the rate of the tax revenues growth does not correspond to that of the economy development?

A: The IMF is interested in supporting the Armenian authorities in raising the ratio between tax revenues and GDP. You are quite right that the economic growth is quite high, but it would be also right to say that tax revenues are also growing very quickly.

Considering the first seven months of 2003 one can say that compared with the same period of 2002 the growth of the tax revenues made 12.9%. In the structure of the tax revenues the growth of the VAT receipts is adequate to that of the GDP (14.9%). Though not quite high the rate of the excise tax collection is quite satisfactory - 11%. On the other hand, the situation with the income tax collection is very good - in the first seven months of this year the index grew by 40.5%. The generally positive picture is considerably darkened by the situation with the profit tax collection. This index has dropped by 19.2% from last year and is even lower than in 1999 and 2000.

This is an absurd situation.

Recently the State Taxation Service promulgated the list of tax payers who declared losses in their activities. Among them the pillars of the Armenian economy, quite successful companies. This is a big and serious problem and the government and the State Taxation Service are much concerned over it.

Q: How is the government going to solve this problem, what specific measures one can take to curb this negative tendency?

A: The government together with the IMF Armenian Office are working on the ways that can help to solve the problem. It's early yet to talk about any specific steps but sooner or later the government will make them public.

To tell the truth to me it's the matter of the tax payer's behavior. The growth of income tax revenues shows that ordinary people realize that they should pay taxes so that the state be able to finance education, health care, the social sphere, to implement state investment programs. Meanwhile, the big companies act quite differently not wishing to ensure tax revenues. It is not right when an ordinary citizen pays taxes while a big company evades doing that, avoiding cooperation with the state and trying to deceive the taxation bodies.

Q: Nevertheless, what do you think, if the general rate of the tax revenues growth is slower than that of the economy development, does this mean that at best Armenia will continue lagging somewhere close to this low 15% and that the state will further suffer from a constant shortage of means and inability to carry out vital programs?

A: Of course, the higher is the tax collection the better, but 13% growth is not a bad index at all. It is not obligatory that the growth of tax revenues be high than that of GDP or that they should be parallel. I think that in the second half of the year the rate will drop a bit to 10%-12%.

Q: What do you think of the fact that external transfers constitute a substantial part of Armenia's GDP?

A: This factor should not be separated from the total economy growth. In any case real money is flowing into Armenia giving people incomes and allowing them to buy goods - these all are links of one and the same chain. This money is a good basis for the breakthrough the Armenian economy is making at present. I hope that the growth will continue giving birth to more and more companies. It is possible that the Lincy Foundation will give the country new sums.

Q: But some experts point to some unexplicable contradictions. For example, high economic growth in Armenia does not lead to an increase in energy consumption, on the contrary, this index is even dropping?

A: It should be noted that the energy sector management has considerably improved. Formerly there was a mess in the sphere. Very much energy was being stolen. Today after privatization and structural reforms the situation has changed. The IMF Armenian Office is no longer much concerned about this problem and is giving less and less attention to this direction.

Q: How do you evaluate the implementation of the poverty reduction and economic growth program in the context of better remuneration for government officials and raising of the very low incomes of teachers, cultural workers, doctors and scientists?

A: The key to this problem is expansion of the tax basis and stable economic growth. It is true that in these spheres the wages are very low and one can hardly make a living but this is what the state can do for the time being. Only in case of a substantial growth of its incomes will the government be able to solve the problem. This year it has taken a significant step in this direction. During the first seven months with the support of the IMF and the WB the government has tried to repay all the arrears and almost solved this painful problem in June. Now the task is to systematically raise the wages in a way not posing threat to the budget situation.

The IMF is often criticized in Armenia for not paying sufficient attention to the fulfillment of special target tasks related to the tax collection. I would like to stress once again that Armenia direly needs government investments. This first of all concerns the raise in wages. People must enjoy more or less normal living standard. In order to attain this goal the government should mobilize all of its capacities.

Emmanuil Mkrtchyan, ARMINFO, 27 AUGUST 2003